CIRCULAR

GUIDELINES FOR THE GOVERNMENT'S DECREE NO. 100/2015/ND-CP DATED OCTOBER 20, 2015 ON DEVELOPMENT AND MANAGEMENT OF SOCIAL HOUSING

The Circular No. 20/2016/TT-BXD dated June 30, 2016 of the Minister of Construction on guidelines for the Government's Decree No. 100/2015/ND-CP dated October 20, 2015 on development and management of social housing, which comes into force from August 15, 2016, is amended by:

The Circular No. 02/2019/TT-BXD dated July 01, 2019 of the Minister of Construction on elaboration of regulations on periodic reporting; amendments to and replacement of some Articles of Circulars related to regulations on periodic reporting under the state management of the Ministry of Construction, which comes into force from August 15, 2010.

Pursuant to the Law on Housing dated November 25, 2014;

Pursuant to the Government's Decree No. 100/2015/ND-CP dated October 20, 2015 on development and management of social housing;

Pursuant to the Government's Decree No. 62/2013/ND-CP dated June 25, 2013 defining the functions, tasks, entitlements and organizational structure of the Ministry of Construction;

At the request of Director of Housing and Real Estate Market Authority;1

The Minister of Construction hereby promulgates a Decree providing guidelines for the Government's Decree No. 100/2015/ND-CP dated October 20, 2015 on development and management of social housing.

Chapter I

GENERAL

Article 1. Scope

1. This Circular provides guidelines for the Government's Decree No. 100/2015/ND-CP dated October 20, 2015 on development and management of social housing (hereinafter referred to as Decree No. 100/2015/ND-CP) regarding: standards for social housing in which households and individuals invest; determination of selling prices and rents for social housing; documents proving eligibility to benefit from social housing policies, sample contracts for sale, lease and lease purchase of social houses.

2. The lease, lease purchase and management of social houses specified in Clause 1 Article 53 of the Law on Housing shall comply with the Government's Decree No. 99/2015/ND-CP dated October 20, 2015 on guidelines for the Law on Housing and its instructional documents.

Article 2. Regulated entities

This Circular applies to organizations, households, individuals and regulatory authorities relevant to development and management of social houses specified in Article 2 of Decree No. 100/2015/ND-CP .

Chapter II

STANDARDS FOR SOCIAL HOUSES IN WHICH HOUSEHOLDS AND INDIVIDUALS INVEST

Article 3. Room standards

Each room of a social house in which a household or individual invests for sale, lease or lease purchase must satisfy construction quality requirements specified by construction law and the following standards:

1. The minimum usable area of a room is 10 m²; minimum usable width is 2.40 m; minimum usable height is 2.70 m.

2. A room must have a door and window to ensure ventilation and natural lighting.

3. Surrounding walls and walls separating the rooms must be made of fire resistant and waterproof materials.

4. The roof must not be covered with flammable and waterproof materials.

5. The floor must be paved with tiles or mortar and higher than the driveway, front yard or sidewalk.

6. Lighting is adequate (at least one 40W electric light for an area of 10 m²) and an electric socket for each person.

7. If the bathroom is located within the room, it must be separated from the bedroom with a wall.

8. Clean water must be supplied according to relevant regulations and standards of the specialized law.

9. Fire safety equipment is available as prescribed.

10. Minimum average usable area is 5 m²/person.

11. In case of a terraced social house for sale or lease purchase, each apartment must have each own bathroom. In case of a social house for lease, there may be a shared bathroom for more than one room as long as there are separate men’s and women’s rooms.

Article 4. Apartment and house standards

Each social apartment or house in which a household or individual invests for sale, lease or lease purchase must satisfy construction quality requirements specified by construction law and the following standards:

1. An apartment of an apartment building shall meet standards for closed apartments specified by construction and housing laws and has a minimum usable area of 25 m² (including the bathroom).

2. A house shall meet the standards specified in Article 3 of this Circular and has its own bathroom(s) with a minimum usable area of 25 m2 (including the bathroom(s) and meet level 4 construction standards.

Article 5. Requirements for land area for construction of social houses

1. The land area for construction of a social house in which a household or individual invests for sale, lease or lease purchase shall conform with construction planning and not be located in an area where construction is banned, not violate the safety corridor of any traffic, irrigation or energy work, historic or cultural site or another protected area prescribed by law; not face the threat of landslide, flash flooding, inundation, flooding or pollution by industrial wastes, a landfill or cemetery; not violate public land or be under dispute.

2. The construction of essential infrastructure (traffic, lighting, water supply and drainage, fire safety, hygiene works) within the land area must comply with regulations and standards of the specialized law.

3. Each block shall have rules and regulations put up at a noticeable position.

Chapter III

DETERMINATION OF SELLING PRICES AND RENTS FOR SOCIAL HOUSES

Article 6. Rules for determination of selling prices and rents for social houses

1. Regarding a social house built under a project:

a) The selling price or rent for a completely built apartment or house shall be determined by the investor in accordance with the rules specified in Clause 1 through 3 Article 21 of Decree No. 100/2015/ND-CP ;

b) The selling price or rent for an apartment is determined according to the carpet area;

c) The commercial area of a social housing project specified in Points b and c Clause 1 Article 9 of Decree No. 100/2015/ND-CP , which is specified in the project and approved by a competent authority, for defraying investment cost, reducing the price/rent and operating cost.

The amount of profit from commercial area used for reduction of price/rent, operating cost must be specified in the financial statement of the whole project as prescribed in Point d of this Clause. Provincial Departments of Construction shall inspect this.

d) Profits from sale, lease or lease purchase of a commercial work in a social housing project shall be recorded as follows:

- If the commercial work (including housing area) is sold or leased out, the actual or estimated profit shall not be smaller than exempted land levy or land rent for the land area of such commercial work, or divided land levy or land rent for the floor area of a house (in case of sale, lease or lease purchase of 20% of housing area at commercial price).

- In consideration of the price/rent for the commercial work (including housing area) in reality, the investor shall offset the profit against the price/rent so that it is suitable for incomes of beneficiaries of social housing policies.

dd) Pursuant to Point a through d of this Clause, the investor shall determine the prices/rents and submit a proposal to the People’s Committee of the province where the project is located. If the social house has been complete and an audit of the project cost has been carried out as prescribed, the People’s Committee of the province might verify the prices/rents according to the audit report. The People’s Committee of the province shall request the Provincial Department or a local price-verifying body to verify the prices/rents proposed by the investor. The verifying body is responsible for the result and punctuality of price verification.

Within 30 days from the day on which the valid proposal is received from the investor, the verifying body shall carry out verification and send a notice of verification result to the investor which specifies its consent or necessary revisions (if any). According to the notice of verification result, the investor shall fix the prices/rents which shall not exceed the approved prices/rents.

If the verifying body does not send such notice by the deadline, the investor is entitled to fix the prices/rents proposed and sign sale/lease/lease purchase contracts with customers as long as the fixed prices/rents are sent to the Provincial Department of Construction before any contract is concluded. When a notice of verification result is issued and the contractual prices/rents are lower than the approved one, the former must not be increased; if the contractual prices/rents are higher than the approved one, the investor shall re-conclude the contracts or issue appendixes to such contracts and return the differences to buyers, tenants or buyers/tenants.

2. Regarding a social house invested by a household or individual for sale, lease or lease purchase, its price/rent shall be determined by the household or individual as long as it does not exceed the price bracket promulgated by the People’s Committee of the province. Before signing a sale/lease/lease purchase contract with a customer, the investor shall send the list of prices/rents to the Provincial Department of Construction.

The People’s Committees of provinces shall request relevant authorities to study the methods specified in Article 7 through 9 of this Circular and local market prices to develop social housing price brackets.

Article 7. Method for determination of selling prices for social houses

1. The selling price for a social house is determined according to total investment in the construction of the house, loan interest (if any), estimated profit and VAT, exclusive of maintenance cost.

2. Formula:

Where:

- Gi^B: selling price for 1 m2 of usable area of a complete apartment or house at location i (VND/ m²).

- T_đ: total investment in the usable area for sale (VND).

- T_đv: divided profit from commercial area in the project for the area for sale.

- L: estimated profit of the project which does not exceed 10% of investment in the area for sale (VND).

- S^B: total usable social housing area of the project, including areas of apartments and houses that are not sold by the investor (m²).

- K_i: floor coefficient of the apartment or house i, which is a weighted mean (K of a block is 1)

3. If the selling price determined according to the formula in Clause 2 of this Article is higher than or equal to the selling price of an equivalent commercial house, the investor has to reduce the selling price of the social house.

4. When selling a social house for lease, the depreciation of the house over the lease period shall be deducted from the selling price.

Article 8. Method for determination of rents for social houses

1. The rent for social house is determined according to total investment in the construction of the house, loan interest (if any), estimated profit and VAT and maintenance cost.

2. Formula:

Where:

- Gi^T: monthly rent for 1 m² of usable area of the complete apartment or house at location i (VND/m²/month).

- V_đ: divided investment in the area for lease (VND/year), which is determined according to the following formula:

+ T_đ: investment in the area for lease (VND).

+ r: profit for investment recovery decided by the investor (%/year).

+ n: number of years for investment recovery which is at least 15 years; for a social house for lease only, n is at least 20 years.

- 12: 12 months.

- L: estimated annual profit which does not exceed 15% of investment in the area for lease (VND/year).

- B_t: divided annual average maintenance cost of the area for lease (VND/year).

- T_dv: divided profit from commercial area (including commercial houses) in the project of the area for lease (VND/year).

- Si^T: usable area of the apartment or house for lease at location i (m²).

- K_i: floor coefficient of the apartment or house i, which is a weighted mean (K of a block is 1).

3. If the rent determined according to the formula in Clause 2 of this Article is higher than or equal to the selling price of an equivalent commercial house, the investor has to reduce the rent.

Article 9. Method for determination of payments for lease purchase of social houses

1. The payments lease purchase of a social house is determined according to total investment in the construction of the house, loan interest (if any), estimated profit and VAT, exclusive of maintenance cost.

2. Formula:

Where:

- Gi™: monthly payment for 1 m² of the complete apartment of house at location i (VND/m²/month).

- Ai: ratio of remaining value of the apartment or house at location i (exclusive of first instalment) to initial value of such apartment or house (A < 1) according to the lease purchase contract.

- V_đ: divided total investment in the project of the area for lease purchase by year (VND/year), which is determined according to the following formula:

+ T_đ: investment in the area for lease (VND).

+ r: annual profit for investment recovery decided by the investor (%/year).

+ n: lease purchase period agreed between the seller and the buyer/tenant which is at least 05 years.

- L: estimated annual profit which does not exceed 15% of investment in the area for lease purchase (VND/year).

- T_dv: divided profit from commercial area (including commercial houses) in the project of the area for lease purchase (VND/year).

- Si™: usable area of the apartment or house for lease purchase at location i (m²).

- K_i: floor coefficient of the apartment or house i, which is a weighted mean (K of a block is 1).

3. If the monthly payment determined according to the formula in Clause 2 of this Article is higher than or equal to that of an equivalent commercial house, the investor has to reduce the initial monthly payment.

Chapter IV

DOCUMENTS PROVING ELIGIBILITY FOR SUPPORT POLICIES AND SAMPLE CONTRACTS FOR SALE, LEASE AND LEASE PURCHASE OF SOCIAL HOUSES

Article 10. Documents proving eligibility to benefit from social housing policies

1. Where the buyer, tenant or buyer/tenant of a social house is a household or individual:

a) An application for purchase, lease or lease purchase of the house according to Template No. 01 in Appendix I enclosed herewith.

Where a social house that was purchased or lease-purchased is resold as prescribed in Clause 5 Article 19 of Decree No. 100/2015/ND-CP to an eligible buyer, tenant or buyer/tenant of social houses, the application submitted by the rebuyer must bear the certification of the Provincial Department of Construction that the rebuyer has not received any benefits from social housing policies.

b) Confirmations of eligibility:

- The entities specified in Point a Clause 1 Article 22 of Decree No. 100/2015/ND-CP shall submit form No. 02 in Appendix I enclosed herewith.

- The entities specified in Point b Clause 1 Article 22 of Decree No. 100/2015/ND-CP shall submit form No. 03 in Appendix I enclosed herewith.

- The entities specified in Point c Clause 1 Article 22 of Decree No. 100/2015/ND-CP shall submit form No. 04 in Appendix I enclosed herewith.

- The entities specified in Point dd Clause 1 Article 22 of Decree No. 100/2015/ND-CP shall submit form No. 05 in Appendix I enclosed herewith.

c) Documents proving residence and social insurance payment are specified in Clause 2 Article 22 of Decree No. 100/2015/ND-CP .

d) Documents proving income adequacy:

- The entities specified in Point a Clause 3 Article 22 of Decree No. 100/2015/ND-CP shall submit form No. 03 in Appendix I enclosed herewith.

- The entities specified in Point a Clause 3 Article 22 of Decree No. 100/2015/ND-CP who have resigned and the entities specified in Point b Clause 3 of Article 22 shall submit form No. 06 in Appendix I enclosed herewith (certification not required).

- An entity specified in Point a Clause 3 Article 22 of Decree No. 100/2015/ND-CP who has obtained a certification of eligibility to benefit from social housing policies before the effective date of this Circular but has not obtained a certification of income adequacy shall submit form No. 07 in Appendix I enclosed herewith.

2. The entities specified in Point d Clause 1 Article 22 of Decree No. 100/2015/ND-CP shall submit form No. 08 in Appendix I enclosed herewith.

3. A household or individual that takes a loan to build, renovate or repair a house for residential purpose shall submit:

a) An application for loan prescribed by the lending bank;

b) A certification of eligibility, housing status and income adequacy specified in Point b and d Clause 1 of this Article.

c) Documents proving current residence: Certified true copy of the residence book in the province where the piece of land for construction, renovation or repair of the house is located.

4. Documents specified in Clause 1 through 3 of this Article have to be certified and shall be valid for 02 years. After the aforementioned 2-year period, another certification is required if the applicant has not received benefits from social housing policies and wishes to buy, lease or lease purchase another social house or take another loan for construction, renovation or repair of a house for residential purpose.

5. The documents specified in this Article may be changed or replaced by the People’s Committees of provinces as long as information about the applicant, certifying body and contents requiring certification is sufficient.

Article 11. Contracts for sale, lease and lease purchase of social houses

1. A contract for sale, lease or lease purchase of a social house shall contain:

a) Names and addresses of the parties;

b) Information about the house;

c) Price or rent;

d) Method of payment and payment time;

dd) Transfer time;

e) Warranty clause;

g) Rights and obligations of the parties;

h) Commitments of the parties;

i) Contract termination clause;

k) Other arrangements;

l) Dispute settlement;

m) Contract effect;

2. If the social house is an apartment, apart from the information specified in Clause 1 of this Article, the contract must specify the private area and shared area of the investor and the buyer, tenant or buyer/tenant, apartment area, usable area (carpet area) which is the basis for price/rent calculation; maintenance cost, operating cost and rules for adjustments thereto before an apartment building management board is establishment.

3. Sample contracts are provided in Appendix II enclosed herewith.

4. The sample contracts provided are for reference only. The parties may revise the content of the sample contract as long as mandatory information specified in Clause 1 and Clause 2 of this Article is provided and the contract does not contravene civil laws and housing laws.

Chapter V

IMPLEMENTARY ORGANIZATION AND IMPLEMENTATION CLAUSE

Article 12. Responsibility of the People’s Committees of provinces

1. Perform the tasks related to development and management of local social housing specified in the Law on Housing, Article 30 of Decree No. 100/2015/ND-CP and Clause 2 through 6 of this Article.

2. Establish criteria for selection of entities eligible to buy, lease and lease purchase local social housing in accordance with Clause 3 Article 23 of Decree No. 100/2015/ND-CP .

3. Provide instructions and partially or fully cover the cost of investment in infrastructure of social housing project to reduce the prices/rents depending on conditions of the province; provide instructions on punctual verification of prices and rents for local social housing projects; promulgate price and rent brackets as prescribed in Clause 2 Article 6 of this Circular.

4. Instruct the Departments of Construction, the People’s Committees of districts and communes and relevant agencies to grant certifications of eligibility to benefit from social housing policies as prescribed.

5. Provide guidelines for implementation of social housing laws, inspection of implementation of social housing laws and impose penalties or request competent authorities to impose penalties for violations against social housing laws.

6. Instruct relevant authorities to submit annual, biannual and ad hoc reports on development and management of local social hosing to the Ministry of Construction.

Article 13. Responsibility of Provincial Departments of Construction

1. Perform the tasks related to development and management of local social housing specified in the Law on Housing, Decree No. 100/2015/ND-CP and those given by the People’s Committees of provinces specified in Clause 2 through 4 of this Article.

2. Take charge and cooperate with local authorities in establishing criteria for selection of entities eligible to buy, lease and lease purchase local social housing in accordance with Clause 2 and Clause 3 Article 23 of Decree No. 100/2015/ND-CP ; provide guidance for economic sectors, households and individuals on investment in construction of social house for sale, lease and lease purchase in accordance with law and local conditions.

3. Carry out inspections and impose penalties or request competent authorities to impose penalties for violations against social housing laws.

42. Submit biannual, annual and ad hoc reports on local social housing to the People’s Committees of provinces and the Ministry of Construction according to template No. 12 in Appendix III enclosed herewith.

Article 14. Transitional clause

An entity that has registered for purchase, lease, or lease purchase of a social house and is required to submit documents proving income adequacy specified in Clause 3 Article 22 of Decree No. 100/2015/ND-CP but has not signed a sale, lease or lease purchase contract when this Circular comes into force shall submit forms No. 06 and form No. 07 in Appendix I enclosed herewith.

Article 15. Effect 3

1. This Circular comes into force from August 15, 2016.

2. Circular No. 08/2014/TT-BXD dated May 23, 2014 providing guidelines for the Government's Decree No. 188/2013/ND-CP dated November 20, 2013 on social housing development and management is annulled from the effective date of this Circular.

3. Difficulties that arise during the implementation of this Circular should be reported to the Ministry of Construction for consideration./.